Correlation Between SPDR Barclays and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Dimensional ETF at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPDR Barclays and Dimensional ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and Dimensional ETF Trust, you can compare the effects of market volatilities on SPDR Barclays and Dimensional ETF and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPDR Barclays with a short position of Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Dimensional ETF.
Diversification Opportunities for SPDR Barclays and Dimensional ETF
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SPDR and Dimensional is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust and SPDR Barclays is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPDR Barclays Short are associated (or correlated) with Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Dimensional ETF go up and down completely randomly.
Pair Corralation between SPDR Barclays and Dimensional ETF
Given the investment horizon of 90 days SPDR Barclays Short is expected to generate 0.32 times more return on investment than Dimensional ETF. However, SPDR Barclays Short is 3.11 times less risky than Dimensional ETF. It trades about 0.16 of its potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.04 per unit of risk. If you would invest 2,702 in SPDR Barclays Short on August 27, 2024 and sell it today you would earn a total of 289.00 from holding SPDR Barclays Short or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Short vs. Dimensional ETF Trust
Performance |
| Timeline |
| SPDR Barclays Short |
| Dimensional ETF Trust |
SPDR Barclays and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Dimensional ETF
The main advantage of trading using opposite SPDR Barclays and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Dimensional ETF can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dimensional ETF will offset losses from the drop in Dimensional ETF's long position.| SPDR Barclays vs. Dimensional ETF Trust | SPDR Barclays vs. Dimensional ETF Trust | SPDR Barclays vs. Dimensional Core Equity | SPDR Barclays vs. Dimensional ETF Trust |
| Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional Core Equity | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. Dimensional Emerging Core |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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